Taxation of Offshore Funds - Key Considerations & Guidance for Tax Advisers

Introduction

The offshore funds regime is an increasingly important part of the tax code for many taxpayers.

Offshore funds are a type of collective investment scheme commonly found in portfolios (or held as stand-alone investments) and being able to spot such funds, and correctly advise on their UK tax implications, is critical for all good tax advisers.

The difference between the taxation of an offshore fund and any other form of fund can be significant and HMRC’s increasingly hard-line approach to ‘offshore non-compliance’ has raised the stakes in terms of getting them right.

This is also an area in which clients may be particularly reliant on their advisers because offshore funds are not always easy to identify for those unfamiliar with the concept (for example, a client may think that they hold ‘cash’ as part of their portfolio but in practice they hold an interest in a money-market fund which is subject to the offshore funds rules).

On top of this, there are additional complexities for taxpayers who are remittance basis users and/or are settlors of trusts which hold such investments.

This is because the interactions between the offshore funds regime, the remittance basis and the various anti-avoidance rules which relate to trusts can produce a number of interesting and surprising outcomes.

This short webinar will be relevant to any UK tax advisers who need to consider the taxation of investments for their clients.

What You Will Learn

This webinar will cover the following:

• How to recognise an ‘offshore fund’ and particular points to be aware of (including exemptions from the regime)
• The ‘normal’ tax treatment of reporting and non-reporting offshore funds respectively
• Options for dealing with funds which change reporting status (and the specific issues which arise where the fund is owned by a structure)
• How the offshore funds regime interacts with the remittance basis
• How the offshore funds regime interacts with trusts and the anti-avoidance rules applicable to them

This webinar was recorded on 13th March 2023